Due to government initiatives in countries like China, Singapore and South Korea, the Asia Pacific Internet of Things (IoT) industry in Asia Pacific is set to lead the world in the coming connected era. The International Data Corporation (IDC) predicts that the number of connected units in Asia Pacific will increase from 3.1 billion today to 8.6 billion by 2020, creating a US$583 billion market opportunity.
Over this same period, the total Asia Pacific excluding Japan (APeJ) market size will increase from US$250 billion to US$583 billion according to the market study by IDC.
“The Internet of Things industry has matured considerably over the past year, with a number of large government initiatives across APeJ, and China in particular, driving demand,” says Charles Reed Anderson, Associate VP, Head of Mobility and Internet of Things at IDC Asia Pacific. “This increase in market demand has led to an increased focus on IoT from leading ICT vendors, as well as startups – with each keen to grab their share of the growing IoT market.”
IDC’s IoT Market Forecast shows that China will continue to dominate the Asia Pacific region, and also the global market. China will have 59 % of the APeJ market share by 2020 with one out of every five connected units globally being in China.
However, market size is not the same as market maturity. When the total number of things connected is compared to the overall population, the connections per capita figure shows that South Korea, Australia and New Zealand have the most mature markets, with China sixth out of the 13 APeJ Countries.
Governments are leading the charge
In terms of specific entities, it’s government rather than industry that is leading the way. South Korea has announced its Creative Economy plan, Singapore’s Smart Nation initiatives are making news headlines every week, and Chinese Premier Wen Jiabao has identified IoT as an “emerging strategic industry”. These governments have put vast resources into their IoT strategies aimed at enabling stronger economies and better lives for their citizens in the future connected world.
In a separate study the IDC predicts that governments will increase their spending on IT services. It is expected that IT investments of the Asia Pacific excluding the Japan (APEJ) government sector will increase from US$25.4 billion in 2014 to US$32.5 billion in 2018 with a five-year compound annual growth rate of 6.2%.
Another key finding is that overall IT services spending by the APEJ public sector will surpass overall hardware spending in 2015. Reasons for this trend include consolidation and streamlining of scarce ICT resources, focus on better tools for effective decision making, and addressing the urgent need to increase cybersecurity priorities of digital assets.
The IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets.